Saint-Gobain // Universal Registration Document 2021

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Financial and accounting information 2021 Consolidated Financial Statements

Currency instruments 10.4.1 Currency swaps

Impact on equity of financial instruments 10.4.6 qualifying for cash flow hedge accounting At December 31, 2021, the IFRS cash flow hedge reserve carried in equity has a debit balance of €32 million, consisting mainly of: a debit balance of €27 million in relation to ■ cross-currency swaps designated as cash flow hedges that are used to convert a GBP bond issue into euros; a debit balance of €17 million corresponding to changes ■ in the fair value of interest rate hedges classified as cash flow hedges; a credit balance of €6 million corresponding to changes ■ in fair value of energy hedges qualified as cash flow hedges; a credit balance of €6 million corresponding to changes ■ in fair value of currency derivatives qualified as cash flow hedges. The ineffective portion of cash flow hedge derivatives is not material. Impact on income of financial instruments 10.4.7 not qualifying for hedge accounting The fair value of derivatives classified as “Financial assets and liabilities at fair value through profit or loss” represents a gain of €14 million in 2021 compared to a loss of €4 million in 2020. Embedded derivatives 10.4.8 The Saint-Gobain Group regularly analyzes its contracts in order to separately identify financial instruments classified as embedded derivatives under IFRS. At December 31, 2021, no embedded derivatives deemed to be material at Group level were identified. (excluding lease liabilities) The weighted average interest rate on total gross debt under IFRS and after hedging (interest rate swaps and cross-currency swaps) was 2.1% at December 31, 2021, compared with 2.0% at December 31, 2020. The average internal rate of return for the main component of the Group’s long-term debt before hedging (bonds) was 2.5% at December 31, 2021, compared with 2.4% at December 31, 2020. Group debt structure 10.4.9

The Group uses currency swaps mainly to convert euro-denominated funds into foreign currencies for cash management purposes.

Forward foreign exchange contracts and currency options

Forward foreign exchange contracts and currency options are used to hedge foreign currency transactions, particularly commercial transactions (purchases and sales) and investments.

Interest rate instruments 10.4.2 Interest rate swaps

The Group uses interest rate swaps to convert part of its fixed/variable-rate bank debt and bond debt to variable/fixed rates. Cross-currency swaps The Group uses cross-currency swaps to convert foreign currency (euro) debt into euro (foreign currency) debt.

Energy and commodities 10.4.3 Energy and commodity swaps

Energy and commodity swaps are used to hedge the risk of changes in the price of certain purchases used in Group subsidiaries’ operating activities, particularly energy (fuel oil, natural gas and electricity) purchases.

Other risks 10.4.4 Equity derivatives

Equity derivatives are used to hedge the risk of changes in the Saint-Gobain share price in connection with the performance units long-term incentive plan.

Credit value adjustments 10.4.5 to derivative instruments

Credit value adjustments to derivative instruments are calculated in accordance with IFRS 13 based on historical probabilities of default derived from calculations performed by a leading rating agency and on the estimated loss given default. At December 31, 2021, credit value adjustments were not material.

The table below presents the breakdown by interest rate (fixed or variable) of the Group’s gross debt at December 31, 2021, taking into account interest rate and cross-currency swaps.

Gross debt, excluding lease liabilities

Variable rate

Fixed rate

Total 9,466 1,455 10,921

(in EUR millions)

EUR

826 549

8,640

Other currencies

906

TOTAL

1,375

9,546

(in %)

13%

87%

100%

Accrued interest and other

154

TOTAL GROSS DEBT EXCLUDING LEASE LIABILITIES

11,075

SAINT-GOBAIN UNIVERSAL REGISTRATION DOCUMENT 2021 326

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